Well in that case, viewing this chart, if I am correct, then China's purchasing power shows an declination. Just a slight declination on the US part. All in two years.

Those are two different ways of measuring GDP. For PPP, the 2010 chart, the U.S. sets the standard and every country is pegged in relation to the U.S. economy.

The second chart shows the effect of the recession, the economy declined and is growing again.

In absolute terms the U.S economy is 2.5x the size of China's. China's population will boost its PPP past the U.S. even as the U.S. economy remains larger in absolute terms. When you hear about China overtaking the U.S.'s economy, it will the PPP figure you hear.

Well in that case, viewing this chart, if I am correct, then China's purchasing power shows an declination. Just a slight declination on the US part. All in two years.

Those are two different ways of measuring GDP. For PPP, the 2010 chart, the U.S. sets the standard and every country is pegged in relation to the U.S. economy.

The second chart shows the effect of the recession, the economy declined and is growing again.

In absolute terms the U.S economy is 2.5x the size of China's. China's population will boost its PPP past the U.S. even as the U.S. economy remains larger in absolute terms. When you hear about China overtaking the U.S.'s economy, it will the PPP figure you hear.

This has crossed my mind, sincerely about China's population, and how this plays a part in China's economic growth However, I thought that in the future, it is possible that China could set the absolute standard with the yuan.

Those are two different ways of measuring GDP. For PPP, the 2010 chart, the U.S. sets the standard and every country is pegged in relation to the U.S. economy.

The second chart shows the effect of the recession, the economy declined and is growing again.

In absolute terms the U.S economy is 2.5x the size of China's. China's population will boost its PPP past the U.S. even as the U.S. economy remains larger in absolute terms. When you hear about China overtaking the U.S.'s economy, it will the PPP figure you hear.

This has crossed my mind, sincerely about China's population, and how this plays a part in China's economic growth However, I thought that in the future, it is possible that China could set the absolute standard with the yuan.

The yuan currently has a fixed value of 6.31 to the U.S. dollar. The black market rate is going to be different.

[edited]

Currently, China adopts a managed floating exchange rate regime that is tied to a basket of foreign currencies. The PBOC announces a central parity for the yuan against nine other currencies on every trading day and allows the yuan to rise or fall by 0.5 percent from the rate every day.

The chief foreign exchange regulator said since the fourth quarter of 2011, the domestic spot and futures markets, as well as the non-deliverable forward offshore market, have expected the Renminbi's exchange rate to fluctuate in a two-way manner rather than just the single-direction of appreciation that was anticipated in the past.

Yi vowed to continue to improve the yuan's exchange formation mechanism and boost the flexibility of the yuan's two-way fluctuation due to more mature conditions created by China's international balance of payment and market expectations.

However, Yi said no one could tell the exact balanced point of the yuan's exchange rate, as it would be decided by the supply-and-demand relation in the market.

China will continue the market-based reform of the yuan's exchange rate formation mechanism and let the market play a greater role in the process to help with more balanced international payment and a more sustainable economy, Yi added.

During the process of the yuan's moving closer to a balanced point in the exchange rate, the central bank will gradually reduce its intervention in the market to better reflect a market-based and managed floating exchange rate system, Zhou said.

Last week, the PBOC governor said China is considering "appropriately" widening the daily trading band for the yuan

A ‘Reserve Currency’ is an internationally accepted currency that is held on deposit by governments, and is used by companies to settle trades. When you travel it’s never hard to find a currency exchange and they’ll always have US Dollars and Euros listed. Japan, China, India and all other Asian countries have vast holdings of US Dollars and Euros to ensure they can trade and grow.

Yet in order to serve as a reserve currency the legal tender must behave. It shouldn’t change value dramatically. It shouldn’t ever be at risk of default. And it needs to be globally available.

Against these three criteria both the US Dollar and the Euro fail the first two. So now a former advisor to the People’s Bank of China, Professor Xia Bin, suggests China’s Yuan can step in. The Yuan, also known as Renminbi, is the official currency of China.

One problem with the Yuan is it isn’t globally available. So steps are being taken to settle that problem.

“To reduce using US Dollar and make Yuan widely used beyond its borders as Regional currency, China plans to sign an agreement with all of 10-member of Association of South East Asian Nations (ASEAN) to settle trade in Yuan.” (Source:Wikipedia)

That means companies operating within ASEAN countries could order goods from China and receive then settle an invoice in Yuan. To date that’s established in Singapore, Malaysia and Indonesia.

The other challenge for the Yuan is to establish a floating or free market exchange rate. Currently the rate of exchange is set by the Government of China. Allowing a currency to trade at a price set by the markets – versus the governments – is called “Depegging”. When Australia depegged its dollar the initial fluctuations were extreme but the Australian dollar soon settled into a comfortable trading band. (That band has been stretched of late as the weak US economy against the booming Aussie economy means the Australian dollar is at or near historic high exchange rates.)

Many have studies the effects on China of depegging its currency (see EuroJournals for a good article).

Were the Yuan to float free there would be a period of change until it, too, settled into a comfortable trading band. Countries that leave its currency too long in an artificially high official rate soon develop a rampant black market. Today Myanmar (the country formerly known as Burma) has an official exchange rate of 8 Kyat to the US Dollar – and a black market rate of 820. China doesn’t have the same problem as street market conversions of US Dollars closely mimic the official exchange rate. There’s great confidence in the system.

It may be a long time before you’re on holiday in Greece exchanging Yuan at the airport for Drachma (Oops – I mean Euros). But the arrival of the Yuan as a global reserve currency is long overdue, and will only serve to strengthen the global exchange and trade systems.

Offshoring manufacturing jobs to China looked like the perfect way to cut costs a decade ago, but now companies that produce everything from computers to car parts are returning to the United States in growing numbers. Labor economists say the country needs to invest in more vocational and technical training programs so millions of jobless factory workers are equipped with the skills to benefit from this trend.

According to a survey by the Boston Consulting Group of executives at 106 manufacturing companies with $1 billion or more in sales, 37 percent said they are planning or "actively considering" onshoring. Among companies with more than $10 billion in revenue, that percentage shot up to nearly half. Leading the movement were companies that make rubber and plastic products, industrial machinery and electronics and computer equipment.

Manufacturing executives cite several factors driving their decision, said BCG senior partner Harold Sirkin. The first is that the cheap Chinese labor that looked so appealing 10 years ago isn't so cheap anymore.

"Chinese labor has been rising at 20 to 50 percent a year since 2001," Sirkin said. "We're expecting it to be somewhere around $6 an hour in 2015." While this is still low compared to the average $26 hourly wage BCG predicts an American manufacturing employee will earn in 2015, Sirkin added that the productivity of American workers is between 3.2 and 3.4 times higher than that of their Chinese counterparts. Also, American factories tend to be more automated, which means robots rather than paid workers do many tasks.

Rising energy costs also play a big role. The price of oil has jumped from around $25 a barrel at the turn of the century to around $100 today, which significantly increases the cost of shipping goods from Asia.

In a recent interview, Charles Bunch, chairman and CEO of PPG Industries, told CNBC's Jim Cramer that the cost of energy within China also is much higher. "The China cost advantage in many energy-intensive industries is diminishing," he told Cramer. "Now, the U.S. is going to be much more competitive on the global scene in terms of manufacturing costs."

Sirkin said American manufacturers also are concerned about protecting intellectual property and effective quality control in Chinese factories. Seventy percent of survey respondents agreed with the statement, "Sourcing in China is more costly than it looks on paper."

These companies won't abandon their operations in China entirely, Sirkin said. As a result of that country's burgeoning growth, many factories can be repurposed to serve the domestic market. "Ironically, the growth in China is making it easier for companies to onshore back in the United States," he said.

This could be a boon for millions of unemployed factory workers. "We have the talent in manufacturing and we have a huge pool of unemployed. I suspect that we have a good skill base out there," said Jeff Strohl, director of research at the Center on Education and the Workforce at Georgetown University.

The key challenge will be getting this vast number of workers trained to operate the productivity-enhancing, high-tech robots that make onshoring profitable. Programs designed to teach students vocational and technical skills through community colleges, for example, were touted by President Barack Obama in his State of the Union address as beneficial for job creation. "We do need efforts to home in on these programs," Strohl said. The prospect of election-year budget cuts puts initiatives like this at risk of being reduced or eliminated.

"Education is our investment in the future," he said. "If people have the patience to wait for them to be successful, people will begin to understand that [t]he investment in them will pay back more than the costs."

Offshoring manufacturing jobs to China looked like the perfect way to cut costs a decade ago, but now companies that produce everything from computers to car parts are returning to the United States in growing numbers. Labor economists say the country needs to invest in more vocational and technical training programs so millions of jobless factory workers are equipped with the skills to benefit from this trend.

According to a survey by the Boston Consulting Group of executives at 106 manufacturing companies with $1 billion or more in sales, 37 percent said they are planning or "actively considering" onshoring. Among companies with more than $10 billion in revenue, that percentage shot up to nearly half. Leading the movement were companies that make rubber and plastic products, industrial machinery and electronics and computer equipment.

Manufacturing executives cite several factors driving their decision, said BCG senior partner Harold Sirkin. The first is that the cheap Chinese labor that looked so appealing 10 years ago isn't so cheap anymore.

"Chinese labor has been rising at 20 to 50 percent a year since 2001," Sirkin said. "We're expecting it to be somewhere around $6 an hour in 2015." While this is still low compared to the average $26 hourly wage BCG predicts an American manufacturing employee will earn in 2015, Sirkin added that the productivity of American workers is between 3.2 and 3.4 times higher than that of their Chinese counterparts. Also, American factories tend to be more automated, which means robots rather than paid workers do many tasks.

Rising energy costs also play a big role. The price of oil has jumped from around $25 a barrel at the turn of the century to around $100 today, which significantly increases the cost of shipping goods from Asia.

In a recent interview, Charles Bunch, chairman and CEO of PPG Industries, told CNBC's Jim Cramer that the cost of energy within China also is much higher. "The China cost advantage in many energy-intensive industries is diminishing," he told Cramer. "Now, the U.S. is going to be much more competitive on the global scene in terms of manufacturing costs."

Sirkin said American manufacturers also are concerned about protecting intellectual property and effective quality control in Chinese factories. Seventy percent of survey respondents agreed with the statement, "Sourcing in China is more costly than it looks on paper."

These companies won't abandon their operations in China entirely, Sirkin said. As a result of that country's burgeoning growth, many factories can be repurposed to serve the domestic market. "Ironically, the growth in China is making it easier for companies to onshore back in the United States," he said.

This could be a boon for millions of unemployed factory workers. "We have the talent in manufacturing and we have a huge pool of unemployed. I suspect that we have a good skill base out there," said Jeff Strohl, director of research at the Center on Education and the Workforce at Georgetown University.

The key challenge will be getting this vast number of workers trained to operate the productivity-enhancing, high-tech robots that make onshoring profitable. Programs designed to teach students vocational and technical skills through community colleges, for example, were touted by President Barack Obama in his State of the Union address as beneficial for job creation. "We do need efforts to home in on these programs," Strohl said. The prospect of election-year budget cuts puts initiatives like this at risk of being reduced or eliminated.

"Education is our investment in the future," he said. "If people have the patience to wait for them to be successful, people will begin to understand that [t]he investment in them will pay back more than the costs."

China's population is aging also which is going to raise wages as the number of workers declines.

""Education is our investment in the future," he said. "If people have the patience to wait for them to be successful, people will begin to understand that [t]he investment in them will pay back more than the costs."

A ‘Reserve Currency’ is an internationally accepted currency that is held on deposit by governments, and is used by companies to settle trades. When you travel it’s never hard to find a currency exchange and they’ll always have US Dollars and Euros listed. Japan, China, India and all other Asian countries have vast holdings of US Dollars and Euros to ensure they can trade and grow.

Yet in order to serve as a reserve currency the legal tender must behave. It shouldn’t change value dramatically. It shouldn’t ever be at risk of default. And it needs to be globally available.

Against these three criteria both the US Dollar and the Euro fail the first two. So now a former advisor to the People’s Bank of China, Professor Xia Bin, suggests China’s Yuan can step in. The Yuan, also known as Renminbi, is the official currency of China.

One problem with the Yuan is it isn’t globally available. So steps are being taken to settle that problem.

“To reduce using US Dollar and make Yuan widely used beyond its borders as Regional currency, China plans to sign an agreement with all of 10-member of Association of South East Asian Nations (ASEAN) to settle trade in Yuan.” (Source:Wikipedia)

That means companies operating within ASEAN countries could order goods from China and receive then settle an invoice in Yuan. To date that’s established in Singapore, Malaysia and Indonesia.

The other challenge for the Yuan is to establish a floating or free market exchange rate. Currently the rate of exchange is set by the Government of China. Allowing a currency to trade at a price set by the markets – versus the governments – is called “Depegging”. When Australia depegged its dollar the initial fluctuations were extreme but the Australian dollar soon settled into a comfortable trading band. (That band has been stretched of late as the weak US economy against the booming Aussie economy means the Australian dollar is at or near historic high exchange rates.)

Many have studies the effects on China of depegging its currency (see EuroJournals for a good article).

Were the Yuan to float free there would be a period of change until it, too, settled into a comfortable trading band. Countries that leave its currency too long in an artificially high official rate soon develop a rampant black market. Today Myanmar (the country formerly known as Burma) has an official exchange rate of 8 Kyat to the US Dollar – and a black market rate of 820. China doesn’t have the same problem as street market conversions of US Dollars closely mimic the official exchange rate. There’s great confidence in the system.

It may be a long time before you’re on holiday in Greece exchanging Yuan at the airport for Drachma (Oops – I mean Euros). But the arrival of the Yuan as a global reserve currency is long overdue, and will only serve to strengthen the global exchange and trade systems.

A ‘Reserve Currency’ is an internationally accepted currency that is held on deposit by governments, and is used by companies to settle trades. When you travel it’s never hard to find a currency exchange and they’ll always have US Dollars and Euros listed. Japan, China, India and all other Asian countries have vast holdings of US Dollars and Euros to ensure they can trade and grow.

Yet in order to serve as a reserve currency the legal tender must behave. It shouldn’t change value dramatically. It shouldn’t ever be at risk of default. And it needs to be globally available.

Against these three criteria both the US Dollar and the Euro fail the first two. So now a former advisor to the People’s Bank of China, Professor Xia Bin, suggests China’s Yuan can step in. The Yuan, also known as Renminbi, is the official currency of China.

One problem with the Yuan is it isn’t globally available. So steps are being taken to settle that problem.

That means companies operating within ASEAN countries could order goods from China and receive then settle an invoice in Yuan. To date that’s established in Singapore, Malaysia and Indonesia.

The other challenge for the Yuan is to establish a floating or free market exchange rate. Currently the rate of exchange is set by the Government of China. Allowing a currency to trade at a price set by the markets – versus the governments – is called “Depegging”. When Australia depegged its dollar the initial fluctuations were extreme but the Australian dollar soon settled into a comfortable trading band. (That band has been stretched of late as the weak US economy against the booming Aussie economy means the Australian dollar is at or near historic high exchange rates.)

Many have studies the effects on China of depegging its currency (see EuroJournals for a good article).

Were the Yuan to float free there would be a period of change until it, too, settled into a comfortable trading band. Countries that leave its currency too long in an artificially high official rate soon develop a rampant black market. Today Myanmar (the country formerly known as Burma) has an official exchange rate of 8 Kyat to the US Dollar – and a black market rate of 820. China doesn’t have the same problem as street market conversions of US Dollars closely mimic the official exchange rate. There’s great confidence in the system.

It may be a long time before you’re on holiday in Greece exchanging Yuan at the airport for Drachma (Oops – I mean Euros). But the arrival of the Yuan as a global reserve currency is long overdue, and will only serve to strengthen the global exchange and trade systems.

Great news for China but makes its reluctance to float it puzzling. It's already in its trading range.

The value of the dollar has declined so drastically indeed. I'm reading and hearing that the yuan could become the next best thing since sliced bread.

China (politically, financially and fiscally) is the only thing stopping the yuan from becoming a reserve currency along with the dollar. (At one time there were three reserve currencies; Deutsche Mark, Japanese Yen and the U.S. dollar.)

As long as the U.S. dollar is the only reserve currency the value of the dollar doesn't matter.

The euro in crisis keeps people flocking to U.S. Treasuries, despite all the complaints about the U.S.'s debt and serial deficits.

When U.S. Treasury sales are no longer oversubscribed, then we have a problem. But that's not even on the horizon now.

China will pay a social and political price for the yuan becoming a reserve currency, which is why it is not. Once it becomes a reserve currency, Beijing loses direct control over it's economy.

It's policies will increasing conflict with global trade expectations. China's middle class is going to demand more transparency and less economic interference to preserve their wealth.

Floating the yuan would also raise wages and prices in China which will send more manufacturing offshore (out of China) so jobs will have to be found for the displaced.

Couple that with the millions of Chinese single men who won't be able to marry(due to lack of women), so they will certainly need assets (job, home) to attract a bride.

If China goes through a political/social upheaval, the yuan won't be seen as a reserve currency.

China needs to politically transition to really achieve their goals, but the Communist Party with millions of members is too vested in the current system of party patronage and favors to abandon it although doing so would usher in a Chinese century.

As I have said before, I think China has great potential, but as a currency reserve, I agree that it is not on the horizon.

There is still a "wait and see" tentativeness regarding China. There is still unease regarding China, whether valid or not. I say it's most definitely valid. I cannot imagine too many investors rushing to jump head first onto those waters other than as a rapidly growing marketplace to pander goods, and destination for cheap labor. (for the time being)

As I have said before, I think China has great potential, but as a currency reserve, I agree that it is not on the horizon.

There is still a "wait and see" tentativeness regarding China. There is still unease regarding China, whether valid or not. I say it's most definitely valid. I cannot imagine too many investors rushing to jump head first onto those waters other than as a rapidly growing marketplace to pander goods, and destination for cheap labor. (for the time being)

[Edited 4/22/12 9:19am]

The thing is, we know from history, how this is going to go. Industrialization increases national wealth which increases citizens' expectations. Governments that fail to meet those expectations get swept away. Rarely are the ushered out via the ballot box because giving up all power in untenable to those in power who have their own supporters to look after. Giving up privilege, power, wealth and control for an unknown situation where even what you've kept a new regime may take away jsut doesn't work for most people who managed to climb to the top.

If the yuan were floating and unrest began in China, the currency would collapse as everyone sat out the unrest. The decline in value would force up prices in China, which isn't going to help the prevailing regime. Controlling the yuan and restricting foreign access currently prevents such a downward spiral.

China's Communist Party is damned if they do, damned if they don't. They have probably another decade at most.

The value of the dollar has declined so drastically indeed. I'm reading and hearing that the yuan could become the next best thing since sliced bread.

China (politically, financially and fiscally) is the only thing stopping the yuan from becoming a reserve currency along with the dollar. (At one time there were three reserve currencies; Deutsche Mark, Japanese Yen and the U.S. dollar.)

As long as the U.S. dollar is the only reserve currency the value of the dollar doesn't matter.

The euro in crisis keeps people flocking to U.S. Treasuries, despite all the complaints about the U.S.'s debt and serial deficits.

When U.S. Treasury sales are no longer oversubscribed, then we have a problem. But that's not even on the horizon now.

China will pay a social and political price for the yuan becoming a reserve currency, which is why it is not. Once it becomes a reserve currency, Beijing loses direct control over it's economy.

It's policies will increasing conflict with global trade expectations. China's middle class is going to demand more transparency and less economic interference to preserve their wealth.

Floating the yuan would also raise wages and prices in China which will send more manufacturing offshore (out of China) so jobs will have to be found for the displaced.

Couple that with the millions of Chinese single men who won't be able to marry(due to lack of women), so they will certainly need assets (job, home) to attract a bride.

If China goes through a political/social upheaval, the yuan won't be seen as a reserve currency.

China needs to politically transition to really achieve their goals, but the Communist Party with millions of members is too vested in the current system of party patronage and favors to abandon it although doing so would usher in a Chinese century.

So there are repercussions behind making the yuan an reserve currency? Aren't these the same repercussions behind the dollar in the US? Well, time will tell with the yuan.

China (politically, financially and fiscally) is the only thing stopping the yuan from becoming a reserve currency along with the dollar. (At one time there were three reserve currencies; Deutsche Mark, Japanese Yen and the U.S. dollar.)

As long as the U.S. dollar is the only reserve currency the value of the dollar doesn't matter.

The euro in crisis keeps people flocking to U.S. Treasuries, despite all the complaints about the U.S.'s debt and serial deficits.

When U.S. Treasury sales are no longer oversubscribed, then we have a problem. But that's not even on the horizon now.

China will pay a social and political price for the yuan becoming a reserve currency, which is why it is not. Once it becomes a reserve currency, Beijing loses direct control over it's economy.

It's policies will increasing conflict with global trade expectations. China's middle class is going to demand more transparency and less economic interference to preserve their wealth.

Floating the yuan would also raise wages and prices in China which will send more manufacturing offshore (out of China) so jobs will have to be found for the displaced.

Couple that with the millions of Chinese single men who won't be able to marry(due to lack of women), so they will certainly need assets (job, home) to attract a bride.

If China goes through a political/social upheaval, the yuan won't be seen as a reserve currency.

China needs to politically transition to really achieve their goals, but the Communist Party with millions of members is too vested in the current system of party patronage and favors to abandon it although doing so would usher in a Chinese century.

So there are repercussions behind making the yuan an reserve currency? Aren't these the same repercussions behind the dollar in the US? Well, time will tell with the yuan.

Yes.

No, not the same for the U.S. Well, the U.S. has gone through it's offshoring cycle. That's caused a lot of angst in the U.S. Multiply that by a factor of six for China.

The U.S. is not aging nearly as fast. The U.S. also attracts immigrants who are usually young and beginning their productive work years. China is too homogenous and suspicious of outsiders I think to embrace immigration on the scale the U.S. has.

The U.S. has also gone through labor unheavals and social upheavals that reflected changing society and mores in the 1960's. China's not there, but suppressing it will not eliminate it.

Offshoring manufacturing jobs to China looked like the perfect way to cut costs a decade ago, but now companies that produce everything from computers to car parts are returning to the United States in growing numbers. Labor economists say the country needs to invest in more vocational and technical training programs so millions of jobless factory workers are equipped with the skills to benefit from this trend.

According to a survey by the Boston Consulting Group of executives at 106 manufacturing companies with $1 billion or more in sales, 37 percent said they are planning or "actively considering" onshoring. Among companies with more than $10 billion in revenue, that percentage shot up to nearly half. Leading the movement were companies that make rubber and plastic products, industrial machinery and electronics and computer equipment.

Manufacturing executives cite several factors driving their decision, said BCG senior partner Harold Sirkin. The first is that the cheap Chinese labor that looked so appealing 10 years ago isn't so cheap anymore.

"Chinese labor has been rising at 20 to 50 percent a year since 2001," Sirkin said. "We're expecting it to be somewhere around $6 an hour in 2015." While this is still low compared to the average $26 hourly wage BCG predicts an American manufacturing employee will earn in 2015, Sirkin added that the productivity of American workers is between 3.2 and 3.4 times higher than that of their Chinese counterparts. Also, American factories tend to be more automated, which means robots rather than paid workers do many tasks.

Rising energy costs also play a big role. The price of oil has jumped from around $25 a barrel at the turn of the century to around $100 today, which significantly increases the cost of shipping goods from Asia.

In a recent interview, Charles Bunch, chairman and CEO of PPG Industries, told CNBC's Jim Cramer that the cost of energy within China also is much higher. "The China cost advantage in many energy-intensive industries is diminishing," he told Cramer. "Now, the U.S. is going to be much more competitive on the global scene in terms of manufacturing costs."

Sirkin said American manufacturers also are concerned about protecting intellectual property and effective quality control in Chinese factories. Seventy percent of survey respondents agreed with the statement, "Sourcing in China is more costly than it looks on paper."

These companies won't abandon their operations in China entirely, Sirkin said. As a result of that country's burgeoning growth, many factories can be repurposed to serve the domestic market. "Ironically, the growth in China is making it easier for companies to onshore back in the United States," he said.

This could be a boon for millions of unemployed factory workers. "We have the talent in manufacturing and we have a huge pool of unemployed. I suspect that we have a good skill base out there," said Jeff Strohl, director of research at the Center on Education and the Workforce at Georgetown University.

The key challenge will be getting this vast number of workers trained to operate the productivity-enhancing, high-tech robots that make onshoring profitable. Programs designed to teach students vocational and technical skills through community colleges, for example, were touted by President Barack Obama in his State of the Union address as beneficial for job creation. "We do need efforts to home in on these programs," Strohl said. The prospect of election-year budget cuts puts initiatives like this at risk of being reduced or eliminated.

"Education is our investment in the future," he said. "If people have the patience to wait for them to be successful, people will begin to understand that [t]he investment in them will pay back more than the costs."

China's population is aging also which is going to raise wages as the number of workers declines.

""Education is our investment in the future," he said. "If people have the patience to wait for them to be successful, people will begin to understand that [t]he investment in them will pay back more than the costs."

Okay, I'm listening to the radio the other day and I hear that the US biggest export to China, is our trash.

Cheung Yan, is a Chinese entrepreneur and is the richest individual in greater China.[3] She is the founder and director of the family company Nine Dragons Paper Holdings, a recycling company that buys scrap paper from the United States, imports it into China, and mainly turns it into cardboard for use in boxes to export Chinese goods. The company is China's biggest paper maker.

America’s Biggest Trade Export to China? Trash

According to data provided by the U.S. International Trade Commission, Chinese imports of U.S. cast-offs (scrap metal, waste paper, and the like) surged by an eye-popping 916 percent over the 2000-2008 period, with most of that expansion occurring after 2004

Okay, I'm listening to the radio the other day and I hear that the US biggest export to China, is our trash.

Cheung Yan, is a Chinese entrepreneur and is the richest individual in greater China.[3] She is the founder and director of the family company Nine Dragons Paper Holdings, a recycling company that buys scrap paper from the United States, imports it into China, and mainly turns it into cardboard for use in boxes to export Chinese goods. The company is China's biggest paper maker.

America’s Biggest Trade Export to China? Trash

According to data provided by the U.S. International Trade Commission, Chinese imports of U.S. cast-offs (scrap metal, waste paper, and the like) surged by an eye-popping 916 percent over the 2000-2008 period, with most of that expansion occurring after 2004

Comparative advantage. It makes great economic sense.

Just more raw materials. Think of all the money she saves not having to grow forests to harvest for wood pulp?

It's cheaper for us to send it there, than to process it here and ship China boxes. We get goods in boxes,. which we recycle back to China.

“Incomes really did go up – even among the poorest segment,” says the study’s lead author, Richard A. Easterlin, university professor and professor of economics at the University of Southern California. “The staggering thing is that despite that, overall satisfaction failed to go up.”

Not only did satisfaction fail to go up, it fell like a rock in the early 1990s. Satisfaction slowly climbed back up after that but never to the point where it was at the beginning of China’s economic transformation.

Easterlin and his colleagues looked at two decades of surveys that included questions about life satisfaction. In 1990, those surveys showed that a large majority of the Chinese people, across all age, education and income levels, reported high levels of life satisfaction. A full 65 percent of those in the poorest income bracket reported high satisfaction as compared to 68 percent of the most wealthy.

By 2010, just 42 percent of Chinese in the lowest income bracket reported high satisfaction, compared with 71 percent of the most wealthy.

"Although a precise comparison over the full study period is not possible, there appears to be no increase and perhaps some overall decline in life satisfaction," the study says.

While many people believe economic growth leads to rising happiness, an entire field of economics has shown that happiness and wealth are not always closely correlated.

Part of the explanation for the unhappiness in China may lie in big societal changes that came along with the country's amazing economic boom.

“Here we have people who were basically secure about their jobs, their income and their retirement, and that all goes by the board," Eaterlin said. "So even though incomes got better, overall feelings of anxiety became much more severe and outweighed the material improvements.”

Beyond this, health care was no longer a right. As the system became privatized, fewer could afford doctors’ bills. So along with lowered satisfaction, people were reporting poorer health.

Easterlin sees this as proof that the road to happiness requires more than just bigger paychecks – especially if everyone is getting a bump in pay.

China might make its people happier if the country repaired some of its damaged safety nets, he argues.

But even with that, there might still be plenty of dissatisfaction.

The problem may simply be that people are more concerned about money now and more focused on “keep up with the Jaos,” Easterlin says.

“Incomes really did go up – even among the poorest segment,” says the study’s lead author, Richard A. Easterlin, university professor and professor of economics at the University of Southern California. “The staggering thing is that despite that, overall satisfaction failed to go up.”

Not only did satisfaction fail to go up, it fell like a rock in the early 1990s. Satisfaction slowly climbed back up after that but never to the point where it was at the beginning of China’s economic transformation.

Easterlin and his colleagues looked at two decades of surveys that included questions about life satisfaction. In 1990, those surveys showed that a large majority of the Chinese people, across all age, education and income levels, reported high levels of life satisfaction. A full 65 percent of those in the poorest income bracket reported high satisfaction as compared to 68 percent of the most wealthy.

By 2010, just 42 percent of Chinese in the lowest income bracket reported high satisfaction, compared with 71 percent of the most wealthy.

"Although a precise comparison over the full study period is not possible, there appears to be no increase and perhaps some overall decline in life satisfaction," the study says.

While many people believe economic growth leads to rising happiness, an entire field of economics has shown that happiness and wealth are not always closely correlated.

Part of the explanation for the unhappiness in China may lie in big societal changes that came along with the country's amazing economic boom.

“Here we have people who were basically secure about their jobs, their income and their retirement, and that all goes by the board," Eaterlin said. "So even though incomes got better, overall feelings of anxiety became much more severe and outweighed the material improvements.”

Beyond this, health care was no longer a right. As the system became privatized, fewer could afford doctors’ bills. So along with lowered satisfaction, people were reporting poorer health.

Easterlin sees this as proof that the road to happiness requires more than just bigger paychecks – especially if everyone is getting a bump in pay.

China might make its people happier if the country repaired some of its damaged safety nets, he argues.

But even with that, there might still be plenty of dissatisfaction.

The problem may simply be that people are more concerned about money now and more focused on “keep up with the Jaos,” Easterlin says.

I love the AMC Theatres, in fact I think they are the dominate theatre here. There's Reading, but I don't like them so much it always feels grungy.

We already owe China more than a trillion dollars, so what?. At least they get a half ass movie chain. Better than nothing.

Our debt to China will hopefully never have be paid back if we're lucky and China doesn't foreclose on us. They don't have the calibur of lawywers we have, I say we make them useful and hire them to work out an agreement where we can just give them Arizona, Arkansas, Mississippi, Tennessee, the Carolinas, and maybe Kentucky. We can throw in AMC Theaters for free if we pay the balance in payments. Red states are not worth much to the GDP anyway. Plus, maybe they can do a better job at educating the red states and making something out of them. Who knows?

The Chinese were so cool to us and paid for the Bush wars, the tax cuts for the rich and the Wall St bailouts on credit, we have to do the right and honest thing and pay them back for that beautiful gesture allowing us to do that. They were there when we needed them.

We will just be doing what we did to the native Indians and on Wall St anyway, selling worthless crap and laugh about it later. Hell, It works.

The money we save from not dumping any more good money after bad into red states we could finally get cheap health insurance. We would have pleanty of disposable income to build huge fences to protect our borders. I will volunteer to be a heavily armed Minute Girl along the California/Arizona border on the weekends to keep those Chinese Arizonians out of the US and take our jobs.

The iPhones could then be built in Arizona with cheap Chinese Arizona labor. And with transportation costs way down, we could get our iPhones. iPads and counterfeit goods even cheaper. Win-win.

I love the AMC Theatres, in fact I think they are the dominate theatre here. There's Reading, but I don't like them so much it always feels grungy.

We already owe China more than a trillion dollars, so what?. At least they get a half ass movie chain. Better than nothing.

Our debt to China will hopefully never have be paid back if we're lucky and China doesn't foreclose on us. They don't have the calibur of lawywers we have, I say we make them useful and hire them to work out an agreement where we can just give them Arizona, Arkansas, Mississippi, Tennessee, the Carolinas, and maybe Kentucky. We can throw in AMC Theaters for free if we pay the balance in payments. Red states are not worth much to the GDP anyway. Plus, maybe they can do a better job at educating the red states and making something out of them. Who knows?

The Chinese were so cool to us and paid for the Bush wars, the tax cuts for the rich and the Wall St bailouts on credit, we have to do the right and honest thing and pay them back for that beautiful gesture allowing us to do that. They were there when we needed them.

We will just be doing what we did to the native Indians and on Wall St anyway, selling worthless crap and laugh about it later. Hell, It works.

The money we save from not dumping any more good money after bad into red states we could finally get cheap health insurance. We would have pleanty of disposable income to build huge fences to protect our borders. I will volunteer to be a heavily armed Minute Girl along the California/Arizona border on the weekends to keep those Chinese Arizonians out of the US and take our jobs.

The iPhones could then be built in Arizona with cheap Chinese Arizona labor. And with transportation costs way down, we could get our iPhones. iPads and counterfeit goods even cheaper. Win-win.

[Edited 5/21/12 12:44pm]

We can inflate that debt away and China cannot foreclose.

A 2/6 billion acquisition in the U.S. is not even a big deal. It's only news because the buyer is Chinese.

That seems to spook some Americans for no good reasons.

The U.S. owns business around the globe but American don't complain about why, say GE is making money in Vietnam or India.

I love the AMC Theatres, in fact I think they are the dominate theatre here. There's Reading, but I don't like them so much it always feels grungy.

i have mixed feelings about allowing china to control any media, even entertainment. china's oppressive view of what constitutes acceptable political dialogue may become reflected in this ownership. moreover, china has a history of stealing and bootlegging copyrighted movies.

that being said, perhaps if china continues to be financially invested in the USA, it will be like a high level merger between our countries, averting flat out war

I love the AMC Theatres, in fact I think they are the dominate theatre here. There's Reading, but I don't like them so much it always feels grungy.

i have mixed feelings about allowing china to control any media, even entertainment. china's oppressive view of what constitutes acceptable political dialogue may become reflected in this ownership. moreover, china has a history of stealing and bootlegging copyrighted movies.

that being said, perhaps if china continues to be financially invested in the USA, it will be like a high level merger between our countries, averting flat out war

[Edited 5/22/12 5:53am]

Do you have similar concerns about U.S. investments in China?

China doesn't need to buy anything other than bonds to be financially invested in the U.S.

It's okay for them to buy our debt but nothing else?

The size of cross investment will not prevent a war.

China is not moving the theaters from the U.S. to China. The only thing changing is the name on the door. They aren't buying the chain to flood with Chinese propoganda films. You won't notice ayn changes at the theaters unless they invest in upgrades. The acquisistion is being made to make money here.

This purchase has nothing to do with bootleg movies in China. Bootleg movies in China don't hurt AMC in the U.S.

Some see parallels with the late 1980s and early 1990s, when Japanese companies acquired a number of prized U.S. assets, including Hollywood studios such as MCA-Universal and Columbia Pictures and crown jewels such as New York's Rockefeller Center and California's Pebble Beach golf course.

"More and more Chinese companies are going to try to come in and buy American businesses, just like Japanese companies did in the 1980s," said Sean Yu, a Los Angeles-based executive director at Morgan Stanley Smith Barney who advises Chinese investors. "They want to increase their prestige and their reputation."

"It's all about brand names and status, and AMC is a brand name," said Stanley Rosen, professor of political science at USC and an expert on China. "It gives [Wanda] instant credibility."

Film historian and author Neal Gabler agreed that the Wanda deal could presage another wave of foreign buying in Hollywood.

"I would be almost certain that as the Chinese economy grows, you will see other incursions made into the American entertainment industry," Gabler said. Wanda "may be the first foray, but I guarantee they are not the only ones licking their chops at these American properties."

Some analysts have questioned how the deal benefits Wanda, noting that AMC is a highly leveraged theater circuit. Wanda is assuming $1.9 billion in debt to acquire AMC at a time when theater admissions in the U.S. and Canada have been in a long-term decline.

As for the growing Chinese market, Wanda's ownership of AMC may have no effect on the distribution of American movies in China, where the government maintains tight controls on the number of foreign movies it allows into the country.

"I'm kind of scratching my head on it," said James Marsh, an entertainment industry analyst at Piper Jaffray & Co. "I don't see the strategic synergies of the deal. I think this is more of a vanity purchase than anything else."

By creating the world's largest theater company, however, Wanda could use its size to negotiate favorable terms with major Hollywood studios in the world's two largest film markets.

Americans sold their money losing entities to the Japanese, made a few bucks, the Japanese lost their ass, later someone else bought it back on the cheap. That's the way it goes. Nothing lasts forever and you can never tell which way things are going to go.

Hopefully the Chinese spend a little time and money on their new toy and keep people here employed, what more can anyone ask.

China's economy suffers 'sharp slowdown'

'Clearly the economy is much, much weaker than most people thought until recently ... They have a real mess on their hands'

A construction worker near Xi'an, China. Many have lost their jobs because developers have been caught in a squeeze for money.

By KEITH BRADSHER

XI’AN, China — A nationwide real estate downturn, stalling exports and declining consumer confidence have produced what a Chinese cabinet adviser, quoted on the official government Web site on Thursday, characterized as a “sharp slowdown in the economy.”

Though the Chinese economy continues to expand, construction workers are losing jobs in droves and retail sales grew last month at the slowest pace in more than three years. Investments in fixed assets have increased more slowly this year than in any year since 2001.

The most striking feature of the slowdown is that it extends beyond the coastal provinces, which depend on exports and are closely linked to the global economy, to the country’s far more insular interior, including cities like Xi’an here in northwestern China.

China’s unexpected economic difficulties are starting to unnerve investors in world markets, especially commodity markets, as China is the world’s largest consumer of most raw materials and the second-largest consumer of oil.

A deepening slowdown would ripple across the world economy. Until now, China’s economy barreled ahead mostly unhindered as the main engine of global growth, even as Europe struggled with its government debt crisis and the United States limped along with a crippled housing market.

Cash squeeze Government indexes show realestate prices are falling in more than half of the country’s top 70 urban markets, Xi’an among them. Standard & Poor’s Ratings Services and Moody’s each issued reports on Thursday warning that many of China’s real estate developers face a severe cash squeeze as apartment sales slow to a crawl. The developers still owe heavy interest payments on bank loans.

“Weak property developers in China are likely to face a test of their survival this year,” S.& P. said.

China’s economy was 8.1 percent larger in the first quarter of this year than a year earlier, but virtually all of that growth took place last year. The economy barely grew in the first quarter compared with the fourth quarter of 2011, and the second quarter of this year is likely to show even less growth from the preceding quarter, said Diana Choyleva, a China economist in the Hong Kong office of Lombard Street Research.

The World Bank also warned on Wednesday of a slowdown.

“Clearly the economy is much, much weaker than most people thought until recently,” Ms. Choyleva said. “They have a real mess on their hands.”

China is the world’s largest importer of a long list of commodities, like iron ore and copper. It has also been a big buyer of European factory equipment and luxury goods. The United States economy is much less exposed to a slowdown in the Chinese economy, with exports of goods to China representing less than 0.7 percent of American economic output last year.

Benefiting from heavy government spending on highways and other infrastructure and voracious demand for apartments as poor laborers arrived from the countryside, China’s inland cities had continued to expand even when the rest of the world’s economy fell into serious difficulty in late 2008 and early 2009. But now the economic troubles are evident here in Xi’an, an economic cornerstone of northwestern China that serves as one of the country’s largest transportation and distribution hubs and a manufacturing center for everything from bulldozers to aircraft components.

Sun Yufang, a wholesale dealer in Xi’an in ovens, ranges and water heaters, said that residents had nearly stopped outfitting newapartments or redecorating old ones.

“We didn’t really feel the global financial crisis, but this year, we’ve really felt it — I don’t see a solution unless people start buying,” Ms. Sun said, sitting in a spacious shop with no customers in sight.

Premier Wen Jiabao expressed concern last weekend about the economy after an inspection tour to Wuhan in east-central China. He then led a cabinet meeting on Wednesday that produced the government’s strongest statement yet.

The government should “place stabilizing growth in a more important position and carry out pre-emptive policy adjustments and fine-tuning more forcefully according to the changing situation,” the cabinet statement said.

An explanatory statement from the official Xinhua news agency drafted on Wednesday and posted on the Chinese government’s Web site on Thursday cited Zhang Liqun, a senior economist advising the cabinet, as saying that, “the sharp slowdown in the economy has aroused attention from policy makers.”

A preliminary reading of a monthly purchasing managers index showed that manufacturing had continued to weaken in May, with the index falling to 48.7 from 49.3 in April; a figure below 50 indicates a slowing sector.

The cabinet called for stimulating the economy through faster construction of railroads, schools, clinics and other infrastructure. With the Chinese economy still heavily dependent on investment spending, some economists are optimistic that China can quickly reignite growth.

“When you’ve got state banks lending to state enterprises to implement the state’s five-year plan, you don’t have a lot of downside to investment,” said Paul Gruenwald, a former International Monetary Fund official in Hong Kong who is now the chief Asia economist at ANZ, one of Australia’s biggest banks.

'Never seen it as bad' China has the financial resources to expand government spending sharply. China has a low ratio of debt to economic output, even when sizable local government debts are added to the national debt. Chinese banks have among the world’s lowest rates of loans to deposits, although some banking analysts have questioned whether many loans by state-owned banks to politically influential borrowers will be repaid.

But with the country having finished building much of its infrastructure, it is having a harder time finding further projects that can pass cost-benefit analyses. The Chinese interior has been the biggest beneficiary of infrastructure spending over the last decade, but now shows signs of catching up with the more developed coast.

The Xi’an airport opened a third terminal and another runway on May 3, giving it the capacity to handle as many passengers as John F. Kennedy International Airport in New York, despite considerably smaller daily traffic. Bullet trains connect Xi’an to Zhengzhou, nearly 300 miles to the east, while no fewer than three concentric beltways encircle Xi’an, although traffic jams continue to bedevil the ancient city’s core.

One more big infrastructure project remains: the city opened its first subway line late last year, plans to finish a second line later this year and has begun construction on a third. But crisscross the city these days and there are fewer streets torn up for building projects than in the past.

At the same time, residential real estate construction has slowed sharply after the government imposed a stringent ban last year on the purchase of multiple homes in an effort to discourage speculation and make housing more affordable. Wei Li, a real estate broker in downtown Xi’an, said that prices had fallen 20 percent since the start of this year for new apartments in the hundreds of towers under construction on the city’s periphery, but she said downtown real estate prices were stable. Construction material vendors here, however, say that apartment prices are also falling in downtown neighborhoods.

Jason Lee / Reuters, file

A waste collector carries a sack of recycled material as she leaves a construction site in Beijing on April 13.

Developers across the country have responded to the drop in prices by abandoning the longstanding practice of floodlighting construction sites and working around the clock. They have cut back to one daytime shift, sharply reducing the demand for construction workers.

Xi’an is best known in the West as an ancient capital of China, a Silk Road entrepôt that is home to the terra-cotta warriors. But modern-day Xi’an also plays an important role in the Chinese economy as a regional economic hub with eight million residents.

Store owners and other traders from across northwestern China converge at large covered markets here to buy goods, making Xi’an one of the best places to take the pulse of China’s interior. And now, that pulse feels weak for consumer spending.

Until late March, Ma Xiechuan sold pork at his butcher shop here by hacking large chunks and handing them to lines of customers to take home and carefully slice and dice. But with sales now down by a third, he has so much extra time that he deftly wields his steel cleaver to produce thin slivers, ready for the customer’s wok.

“It’s the fastest downturn in business I’ve seen in more than 10 years here,” Mr. Ma said.

Yian Leilei, a wholesaler of tablecloths and car seat covers, said that sales nose-dived after Chinese New Year on Jan. 23 and had not recovered. Wang Heiyen, a wholesaler of insulated food and beverage containers said his sales were sliding steadily and customers were becoming ever pickier. Ding Lei, the co-owner of a paint and plaster store said his sales had halved since the start of this year. “People are just not buying apartments,” Mr. Ding said. “It was O.K. in 2009. I’ve never seen it as bad as it is now.”

Mayor Dong Jun of Xi’an expressed worry in a post last week on the city’s Web site.

“The economic situation in the whole city from January through April this year is not that optimistic,” he said. “Maintaining the growth rate continues to be very difficult.”